A performance agreement with Modine Manufacturing that calls for Buena Vista to provide tax and fee incentives worth $300,000 in connection with the company’s recently announced expansion plans was approved Dec. 11 by City Council.
Modine last month announced that it would be investing $19.6 million in its Buena Vista operations, creating 57 new jobs and relocating its heating division here from its company headquarters in Racine, Wisconsin.
This latest investment, according to a press release from Gov. Glenn Youngkin’s office, is to “fund a combination of warehouse, office and testing facility construction as well as new machinery and equipment transfers to support growth in Modine’s heating business.” The company currently employs 268 workers at its 199,852-square-foot facility on Magnolia Avenue in Buena Vista. Modine this past year purchased the former REA Wire building at 408 10th Street, adding 169,127 square feet of floor space to its Buena Vista holdings. The 10th Street plant has been undergoing extensive renovations.
The Virginia Economic Development Partnership awarded a $300,000 Commonwealth Opportunity Fund (COF) grant to support the project, contingent upon Buena Vista providing a dollar-for-dollar match, thus necessitating the need for the performance agreement between the city and Modine.
The city is to provide a rehabilitated real estate tax exemption for 10 years, with six years valued at $57,071.20 counting toward the COF. An additional four years (outside of the match) is valued at $38,047.46. The exemption applies only to the increased value – Modine is to continue paying its existing real estate taxes.
Modine is to receive a 60 percent rebate on machinery and tools taxes for five years for its new investment in machinery and tools; this rebate is valued at an estimated $161,160. A building permit fee rebate of 100 percent associated with $6.5 million in building construction/ upfit valued at $54,750 is being granted.
And, finally, an annual water and sewer credit of $5,428 for five years – for a total credit if $27,140 – is to be issued annually. Modine currently pays $36,384 per year for these services.
The value of the total city incentive package over six years comes to $300,121.20. All of the annual incentives are contingent upon verifications of Modine fulfilling its performance requirements.
Kristina Ramsey, Buena Vista’s director of economic development, noted that all of the incentives provided by the city were “determined by using the city’s existing public-private partnership policy for providing local assistance for such projects. All incentives are performance based and contingent upon Modine meeting required job creation and capital investment milestones.”
Modine’s job creation,” said Ramsey, “will be supported through the Virginia Jobs Investment Program [that] provides consultative services and a per-job cash grant designed to support employee recruitment and training activities. These state incentives work together to strengthen Modine’s long-term investment in Buena Vista and help ensure the success of their heating division headquarters expansion.”
Modine’s expansion plans and relocation of the heating division headquarters to Buena Vista, said Ramsey, is “a major economic accomplishment” for the city. “It strengthens our longstanding partnership, protects and grows one of our largest employers and brings significant long-term benefits to the city and the regional economy.”
